Plan For College

Wednesday, January 2, 2013

3 College Saving Setbacks to Plan For and Avoid

There's the old saying that "nothing good comes easy." Many American families experience this first hand while planning and preparing to send teens to college. Unfortunately families can get caught up in unexpected expenses, unrealistic expectations and over-spending on luxuries. Don't risk your long-term goals by falling victim to these major financial setbacks. Take control of your finances and take a preventative approach to reaching your goals by reading this article:

Auto Accidents
According to the Center for Disease Control and Prevention, auto accidents are the leading cause of death for teenagers. Whether its other drivers and vehicles, pedestrians, street signals or bollards and barriers, teens do not always know what potential hazards to look out for. Between legal fees, injuries, car repair and insurance deductibles, an accident to any degree involving any of these factors can be extremely expensive—a major set back for a person or family attempting to save for college.

Leave room in your budget to save for accidents and car trouble so that when these things do happen (they will) it doesn't affect your entire life. Although you can't control all variables of the road you can control the way you interact with other drivers. Be a defensive driver, be cautious of others and don't take part in reckless behavior like gunning yellow lights and speeding. Although it's hard in our digital age to refrain from using electronics while driving like music players, GPS and cell phones, it's best to avoid using all of these while your foot is on the pedal. Think about it this way, would you do any of these things while taking your road test to get your license? If you wouldn't, chances are you shouldn't ever.

Poor Financial Planning
Setting unrealistic goals, not following through with financial plans and not saving enough are all ways families fail to prepare for college. Unlike car accidents, financial planning is completely controllable and falling into common pitfalls is preventable. Unrealistic budgeting happens when your expectations exceed reality. If you average $500 per month on groceries, chances are you won't be able to cut the budget in half. It's more realistic to say you could manage shaving off $100 per month by shopping sales and using coupons. Although you may color coordinate your budget on a spreadsheet and maybe even use a graph to show where your money goes, not sticking to what you plan defeats the purpose of making a budget in the first place. Although it may be hard to sacrifice certain items at first, if you're cutting corners visualize what achieving your goal will feel like. Saving enough money is the biggest hurdle to cross. To be sure you save enough look at the colleges and universities you are interested in and average overall tuition, books and living costs. Subtract the amount of financial aid, grants or scholarships you plan to receive then divide the remainder by the number of months you plan to save over.

Unnecessary Expenses
It's easy to get caught up in things you think you need. Expensive gym memberships, extensive beauty needs, designer clothing and accessories, the latest tech gadget—although these items enhance our living, they are luxuries and not necessities. Sometimes goals require sacrifice. For some more than others, but it's important to keep your eye on the prize and do what you need to do to get where you need to be. In five or 10 years from now you won't look back at life and think about the awesome pair of jeans you bought or the phone you had. You'll feel much better about the decisions you've made in life if you know you did everything you could to reach your goals.